Asian Stocks Fall on QE Taper

Asian stock markets fell on renewed worries about emerging market economies after the US Federal reserve went ahead with a second reduction in quantitative easing

Alliance News 30 January, 2014 | 9:41AM
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The Asian stock markets fell on Thursday on renewed worries about emerging market economies after the US Federal reserve went ahead with a second $10 billion reduction in its monthly bond purchases. A private sector survey showed China's manufacturing activity contracted for the first time in six months in January, underscoring challenges for China as the economy undergoes a transition towards more sustainable development.

Unfazed by recent selloff in emerging markets, the US central bank announced a second USD10 billion reduction in its monthly bond purchases, to USD65 billion, but reiterated that interest rates will not rise well past the time the employment rate declines below 6.5%. Emerging markets saw their currencies suffer once again in the wake of the Fed decision, making investors more risk-averse.

Japan's Nikkei index closed down 377 points or 2.5% at 15,007 after falling over 3% to hit a 2-1/2-month low of 14,854 earlier the day. The broader Topix index shed 2.6%. Exporters fell broadly as the yen climbed against the dollar amid growing concerns about emerging economies. 

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